Corporate Commercial Bank AD (Bulgarian: ,,???????????? ????????? ?????" ??), commonly called Corpbank, was a Bulgarian bank. Corpbank was a universal bank, serving both as a traditional commercial bank, as well as an investment bank.
According to official data from the Bulgarian National Bank (Bulgaria's central bank) at the end of November 2013, Corpbank was the fourth largest bank in Bulgaria in terms of assets, third in terms of net profit, and first in terms of deposit growth. The bank's leadership has been accused of operating a Ponzi scheme. Its license was revoked by the Bulgarian National Bank in 2014. The bank's chairman, Tsvetan Vasilev, fled the country and as of the end of 2014 faces extradition proceeding in Serbia.
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Background
Since 2007, Corpbank is a publicly traded company with a two-tier management system. The shares of the bank are traded on the Bulgarian Stock Exchange Bulgarian Stock Exchange (BSE) - Sofia AD. In 2009, 30% of the bank's capital was acquired by the State General Reserve of the Sultanate of Oman through its subsidiary Bulgarian Acquisition Company II Luxembourg. In 2010, Fata Assicurazioni Danni S.p.A and Fata Vita S.p.A (subsidiaries of the Italian insurance holding Generali Group) acquired a minority stake in Corpbank. In 2013, 9.9% of the bank was acquired by VTB Capital.
In the beginning of 2014, Corpbank signed an agreement with Credit Agricole S.A., France, to acquire 100% of the shares of Credit Agricole Bulgaria EAD's capital. The completion of the acquisition was expected to be done after an approval from the regulatory agencies.
Following a Bank run in the 3rd week of June 2014, the administration of the bank was forced to seek conservatorship from the Bulgarian National Bank. However, its license was revoked on 6 November 2014. The reason for the revocation, according to the Bulgarian National Bank, was a significant exposure of the bank's credit sheet to investors related to Tsvetan Vasilev.
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Corporate management
Supervisory Board
- Tsvetan Vasilev - Chairman of the Supervisory Board
- Zlatozar Surlekov - Member of the Supervisory Board
- Abdul Salam Mohamed Abdullah Al Murshidi - Member of the Supervisory Board
- Faisal Amur Mohamed Al Riyami - Member of the Supervisory Board
- Lyubomir Denev - Member of the Supervisory Board
Management Board
- Orlin Rusev - Chairman of the Management Board, Executive Director
- Iliyan Zafirov - Member of the Management Board, Executive Director
- Georgi Hristov - Member of the Management Board, Executive Director
- Aleksandar Pantaleev - Member of the Management Board, Executive Director
History
Corporate raiding: Corpbank and Vivacom
Purchasing Vivacom
In 2012, Vassilev bought a stake in Vivacom, which is the brand name of the Bulgarian Telecommunications Company EAD (BTC). Vivacom is the largest telecommunications company in Bulgaria. It is the leading market provider in a variety of telecommunications services, including landline, mobile, Internet, radio, and TV. Around 3,500 work for Vivacom, and it is headquartered in Bulgaria's capitol, Sofia.
Back in 2007, AIG executed a buyout of Vivacom, after which Vivacom went heavily into debt. Vassilev spotted an opportunity and raised the capital to purchase the company. At one point, Forbes magazine ranked Vassilev as the second most influential man in Bulgaria.
By 2014, Corpbank was Bulgaria's fourth largest bank, and it had an extensive portfolio of companies that it owned or partially-owned. Corpbank was the only bank in Bulgaria investing in start-ups and entrepreneurs; as such, its profits and power grew.
DPS request of assets
Because of its growth, wealth, and power, in April 2014 one of the most influential political parties in Bulgaria called DPS visited Vassilev. The request was simple: transfer assets for free to the "mobster circle of DPS." Vassilev refused.
Run on the bank
Suddenly, by June and July 2014, Corpbank customers withdrew large amounts of cash in a panic, known as a "run on a bank." At the time, Bulgaria's central bank, Bulgarian National Bank, said runs on Corpbank were part of a "deliberate and systematic attempt to destabilise Bulgaria's banking system" by criminals using emails and texts. The messages urged people to withdraw their money from Corpbank and other large banks. It wasn't until later that the Bulgarian government blamed Vassilev himself for failure of the bank.
Typically, rumors that depositors' money is unsafe is how bank runs start. In the case of Corpbank, several Bulgarian media outlets ran stories accusing Vassilev of trying to organize the murder of Peevski. Prosecutors raided companies affiliated with Corpbank. They confiscated financial documents from those companies. Ultimately, the attempted murder charge was dropped in court. But before that happened, TV stations ran live feeds of the prosecution's raids. Over the course of 4 days, over 20 percent of Corpbank's assets were withdrawn in cash by depositors.
After the bank run, Corpbank was closed for about six months. Corpbank customers were unable to access their money. During this time, Bulgaria didn't have a government (from July to October 2014). The Bulgarian government's currency board denied the Bulgarian National Bank from creating money to pay Corpbank's customers. According to Forbes, "Paying off depositors was therefore impossible. But reopening the bank was not an option either, since that would simply re-start the run. Therefore, the BNB kept the bank "on ice"."
Bank collapse and government takeover
In late 2014, the bank collapsed which caused the largest financial crisis in Bulgaria since the 1990s. Bulgaria's central bank, Bulgarian National Bank, then took control over the bank.
Corpbank was officially shut down and its assets taken over by the Bulgarian National Bank in July 2014. According to media reports at that time, the shutdown was due to a dispute between Vassilev and "Bulgarian media oligarch Delyan Peevski."
Bulgaria violated European Union banking laws, specifically the EU Directive on the Deposit Guarantee Schemes. Bulgaria did not repay eligible deposits within 20 days following the bank's failure, as required by the directive. Bulgaria's Deposit Insurance Fund only had 1 billion euros, which was not enough money to repay the guaranteed deposits for Corpbank.
"Delyan Peevski is simply one of the main tools that the Bulgarian political mafia uses to blackmail Bulgarian business--the visible part of a rather large iceberg of corruption," Vassilev said in a Forbes interview. "The political mafia is persistently trying to downgrade what happened to Corpbank to a personal conflict between Mr. Peevski and me, which is utterly untrue. I had a conflict with the political mafia ruling the country, which has been blackmailing and threatening me for many years."
Charges against Vassilev
In March 2016, the Bulgarian government (through the Commission for Illegal Assets Forfeiture (CIAF)) filed a lawsuit against Vassilev as the main shareholder of Corpbank. The lawsuit accuses Vassilev of using bank money to personally acquire assets and property. The government's lawsuit seeks 2.2 billion leva, which is equivalent to $1.3 billion US dollars. Vassilev blames the failure of the bank on a plot hatched by his competitors and the government, ultimately to gain control over the wealthy telecommunications company Vivacom.
Investments
Corpbank was a universal bank, serving as both a traditional commercial bank, taking consumer deposits and making loans to businesses throughout Bulgaria, and also as an investment bank, sometimes also taking equity stakes in its clients.
The Glass-Steagall Act mandates the separation of commercial and investment banking in the United States. In most of Europe, there is no regulatory distinction between the two.
Until its destruction by Bulgarian regulators and the looting of its assets, Corpbank was arguably the most innovative and entrepreneurial bank in the Balkans.
Starting from scratch in 2001, it was a pioneer in export financing to Bulgarian energy producers and ammunition manufacturers previously without banking options. Bulgarian Defence Industry Association President Stefan Vodenicharov, whose members were Corpbank clients, called the government attacks on Corpbank "a crime" and lamented a dearth of banking alternatives for his members.
Unlike its rivals, Corpbank also made direct investments in its clients and emerging enterprises in Bulgaria, most notably the country's leading telecom Vivacom, which it bought from creditors in 2012.
Other investments of Corpbank include:
- Vivacom (renamed to Bulgarian Telecommunications Company) - biggest incumbent telecommunications company in Bulgaria
- National Unit Radio and TV Systems (NURTS) - telecommunications and mobile infrastructure company
- Avionams - helicopter repair company
- Dunarit - ammunition manufacturer
- Petrol AD - gas (petrol) stations
- Victoria Insurance Co. - a joint venture with Generali, an Italian insurer
- Telish & Castra Rubra Wineries - leading wine maker/exporter
- Rubin - glass container manufacturer
- Kostenets Paper Mill - paper mill company
- Rousse Shipyard - shipyard
Products and services
Corpbank has established itself as one of the most dynamically developing banks in Bulgaria. The bank offers a wide range of bank services for both individual and corporate clients. According to its experts, the competitiveness of Corpbank is due to a number of factors among which: understanding of the target markets and focus on export oriented companies. The stable client base is due to the long-term relations with leading companies in the spheres of trade, energy and utility services, construction, etc.
Corpbank conducts its corporate social responsibility by supporting initiatives and projects in the fields of education, healthcare, science, sports, culture, etc. Some of the initiatives include:
- The Big Check initiative which awards every Bulgarian athlete, who has won an Olympic or World Cup title as well as golden medalists from European championships.
- General sponsorship of the Bulgarian Volleyball Federation
- The Wish Tree initiative, which is aimed at supporting the children from the Dragalevtzi orphanage and the Hristo Raykov orphanage in Gabrovo
- Support for the Bulgarian Sports Federation For Children Deprived of Parental Care through the financial backing of the Federation's annual sports schedule (2012, 2013, 2014) as well as through methodological help.
Awards and recognition
Throughout the years, Corpbank has received a number of awards and recognitions. The bank has won the Dynamic Development Award of the Bank of the Year Association five times (2001, 2002, 2010 ?, 2011, 2012), Zlatna Martenitsa from the Made in Bulgaria - Small and Medium Business Union in the financial institution with the most favorable credit policy category as well as many other recognitions and awards.
In 2012, the bank improved its ranking the See Top 100 Banks ranking by taking the 24th place among the biggest banks in Southeastern Europe. This is 11 positions higher compared to the 2011 ranking when Corpbank took the 35th position. In the beginning of January 2014, the Bulgarian Stock Exchange - Sofia AD awarded Corpbank with the 2013 Investment intermediary with the highest revenue on the BSE - Sofia award.
Attitudes & Altitudes - Quarterly Economic Review
In the beginning of 2012 Corpbank began publishing Attitudes & Altitudes - Quarterly Economic Review of Corpbank. The publication has a Bulgarian and an English version. The publication is prepared by students from the University of National and World Economy and academicians from the university. The publication conducts an economic review of various sectors of the Bulgarian economy. It also contains interviews with experts and business leaders working in the sector that is covered in the each issue.
Cultural heritage
Corpbank's headquarters is located at 10 Graf Ignatiev St. The headquarters of the Bulgarian Commercial Bank, the local bank with the largest capital at the time, was located in the same building from the end of the 19th century until the beginning of the 20th.
The project for the building was made in 1921 by Georgi Fingov, Dimo Nichev, and Nikola Yurukov from the Fingov, Nichev, and Apostolov architectural studio. The building was built in a baroque style which was typical for the beginning of the 20th century. Corpbank has preserved the authentic exterior and interior of the building to a great degree and that is why the building was named as a cultural heritage in 1978. The eminent Bulgarian banker and social figure Atanas Burov was part of the Bulgarian Commercial Bank's Management. The original bureau of Burov, where he worked while he was at the Bulgarian Commercial Bank, is kept at Corpbank's building. ?? The monument of Burov was officially unveiled at the end of 2011. It is located in front of the Ivan Vazov National Theater and is built with funds provided by the Chairman of the Supervisory Board of Corpbank, Tsvetan Vasilev. The monument was built by the sculptor Professor Emil Popov and Petar Stryaskov, architect. Ilia Georgiev, Chairman of the Deserving Bulgarians Foundation is the initiator of the project .
Source of the article : Wikipedia
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